Having a secondary source of income outside of your job can be a highly useful way of building savings and increasing your financial security. However, this is often easier said than done. With full-time work and other responsibilities, few people today have unlimited time to devote to developing a second source of income. What some don’t realise is that there can be ways to increase your savings which require only a little bit of work and know-how. Here are 3 ways of making money passively that you can start right now.
1. Investing in Cryptocurrency
If you keep up to date with financial news, you will have surely heard about the skyrocketing price of cryptocurrencies. The COVID-19 pandemic has highlighted some key advantages of cryptocurrency in comparison with traditional ones. Primarily, cryptocurrencies are not dependent on the fluctuations of the global economy.
As such, they are arguably a more stable, secure and reliable mode of currency. In addition, speculative investors are beginning to notice long-term patterns of increasing value among cryptocurrencies, especially Bitcoin (BTC). These factors have made it a hot investment opportunity among people looking to passively generate some extra income.
Bitcoin is a good choice if you’re looking for a place to start. This is because it is widely available, and its widespread popularity means that it is a good bet to continue increasing in price. Other cryptocurrencies have lower valuations so have potential for greater profits, but the majority of new ones do also fail.
If you have not purchased cryptocurrency previously, you may be unsure of how to do so. Fortunately, today there are numerous platforms which you can use to buy Bitcoin. It is important you do not keep your Bitcoins on these platforms, though, because they can be vulnerable to hacking attempts. The best way to do so is by storing them in a BTC account, as it allows you to keep them offline.
2. Passive Funds
As the title would suggest, passive investing refers to areas you can invest money in which require little day-to-day oversight from yourself. Options like passively managed index funds, real estate investment trusts, and bonds offer opportunities for considerable long-term profits. Most of these are also fairly reliable in generating gains for their investors, as well.
The major drawback of these methods is that as they are focused primarily on long-term profits. As such, you may not see a notable return on your investment for a few years after investment. Bonds, in particular, charge early withdrawal fees if you need your money back prior to an agreed upon period of time.
Robo-investors refer to automated programs which make strategic investments in a variety of areas with little or no human supervision. These decisions are generally made through algorithms that are based on the personal financial information you provide, as well as general market data.
The benefits of these platforms are obvious – they take substantially less commission than financial planners and can also take into account more data. However, they do have notable risks associated with them. Stock trading in general can be volatile, and algorithms are not infallible, either.
Because of the potential risks, if you choose to try these passive income methods, you should make sure to not invest any more than you are prepared to lose. In addition, try to avoid platforms which ask for continuous access to your money, so you can be certain that your potential losses are capped.
This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be investment, financial, or other advice.
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